REG - Malvern Inter. PLC - Trading update

Malvern InternationalAnnouncement

04/03/2022 07:00

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RNS Number : 6108D  Malvern International PLC  04 March 2022

4 March 2022

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

MALVERN INTERNATIONAL PLC

("Malvern", the "Company" or the "Group")

 

Trading update

 Opportunities to capitalise as travel reopens

 

Malvern International plc ("Malvern" or the "Company"), the global learning
and skills development partner, is today issuing an update in respect of
current trading and its year ended 31 December 2021 ("FY21").

FY21

While the longer term industry fundamentals remain strong, unsurprisingly the
dynamic situation around international travel throughout last year continued
to affect the Company's performance into the second half of 2021.

Revenues in the second half were as expected lower than the first half and
costs were higher as we chose to invest and further strengthen our sales and
marketing capability, with two sales staff recruited in China and the
development of our Mandarin website hosted in China.  China is the biggest
student recruitment market to the UK for Higher Education and English Language
Teaching ("ELT"). Investment in this region fits with our strategic goals.

As a result of these factors, the preliminary unaudited assessment of the
Group's trading for the full year indicates revenues of circa £2.4 million
(FY20 £1.9 million) and a loss for the year of circa £1 million (FY20 £1.33
million). Unaudited Net debt as at 31 December was £5.8 million. The Company
is delighted to announce separately this morning the successful renegotiation
of its existing debt facility.

The number of ELT students across our sites in Manchester, London and Brighton
grew back to approximately 80% of 2019 levels in Q4 2021. With fewer
international students in 2021, we grew the proportion of UK-based students
through a concerted sales and marketing effort, including upgrading our
website; we will continue to leverage this audience. Malvern Online Academy
("MOA") is supporting students with supplementary and hybrid learning where
required.

In December 2021, all our schools were approved by the Kuwait Cultural Office
("KCO"), adding to the long-term partnership formed between our Manchester
school and the KCO. As a result, Kuwaiti sponsored students can be accepted in
London, Brighton, Manchester and on our London NCUK programme. The KCO, funded
mainly through the Kuwait Ministry of Education, supports on average 8,000
students per year across the UK. The language students typically study for 36
weeks, and have provided our Manchester centre with a consistent number of
students and recurring income stream over the last six years. With these
approvals, we are looking to double the number of KCO-sponsored students we
recruit across the Group to around 50 in the current year.

 

Current trading and outlook

There remains a clear back-log of demand for all our education services as
demonstrated by an uptick in ELT student numbers in the first quarter of 2022,
compared to the previous quarter. We currently have 144 students enrolled in
University Pathways courses. Of these, 16 students are part of our first ever
NCUK cohort and we are looking to build on this for the next academic year.
Despite the traffic light system on international travel extending into the
autumn of 2021 which coincided with application deadlines for key geographies,
we still managed to enrol good student numbers.  Our overall January pathway
intake was 80 students compared with 43 last year.

Our pipeline of bookings for our ELT centres in London and Manchester are the
strongest since the start of the pandemic and our expectation is to return to
2019 levels, exceeding this where possible, with Brighton enjoying a
successful full first year of operations. Our biggest agents in the MENA
region have indicated they expect students to return in larger numbers after
Ramadan, late May. Therefore we are anticipating an influx of bookings from
mid-April.

Provisional bookings for juniors are up significantly as we expect the Italian
government funded INPS programmes to go ahead in summer of 2022. We see the
foundations being laid in 2022 for this to be a major part of the business
going forward. The Tempus Hungarian scheme has been delayed to 2023.

As part of our recruitment strategy we have continued to build our sales and
marketing capability. In China - the biggest international student market to
the UK for Higher Education and Junior summer camps - we have appointed two
Regional Sales Managers based in Chengdu and Beijing and launched a Chinese
website. In addition we have appointed a Sales Manager based in Indonesia and
a Regional Director for MENA and Turkey. We are also in late stages of
appointing an International recruitment advisor in India and one in Nepal.
Both are growth markets for Higher Education student recruitment. We are
expecting the new recruits to drive the growth of a global partner network and
in turn our student numbers across Pathways and ELT adult and junior
programmes.

 

Richard Mace, Chief Executive Officer, said: "January student numbers and the
Government announcement to remove testing for fully vaccinated arrivals into
the UK, provides us with confidence that student numbers will return to
pre-pandemic levels this year. Our efforts to build our sales and marketing
capabilities into key territories, as well as strengthening existing
partnerships with embassies and key clients whilst maintaining tight control
of costs, will help support the growth of student numbers across all our
programmes.  Malvern Juniors will return in the summer of 2022 with four
centres currently running."

"The UK international student market has continued to consolidate with fewer
providers today than two years ago due to M&A activity and closures.  As
a business, we are well positioned to take advantage of the expected growth in
overseas student numbers over the coming years."

"These factors, combined with the separate announcement made today regarding
the successful restructure of our debt facility with BOOST&CO. which
releases valuable financial resources to pursue our objectives this year,
makes us extremely well placed to build the business in 2022 and beyond."

 

 For further information please contact:

 Malvern International Plc                 www.malverninternational.com (http://www.malverninternational.com/)
 Mark Elliott - Chairman                   Via our website
 Richard Mace - Chief Executive Officer

 WH Ireland (NOMAD & Broker)               www.whirelandcb.com (http://www.whirelandcb.com/)
 Mike Coe / Sarah Mather                   0207 220 1666

 

 

 

 

Notes to Editors:

Malvern International is a learning and language skills development partner,
offering international students essential academic and English language
skills, cultural experiences and the support they need to thrive in their
academic studies, daily life and career development.

 

University Pathways - on and off-campus university pathway programmes helping
students progress to a range of universities, as well as in-sessional and
pre-sessional courses.

 

Malvern House Schools - British Council accredited English Language Training
at English UK registered schools in London, Brighton and Manchester.

 

Malvern Online Academy - British Council accredited online school, offering
supported tuition to students from around the world in English language,
higher education, and professional education.

 

Juniors and summer camps - fully-immersive summer residential English
language camps and bespoke group programmes for 13 to 18 year olds.

 

For further investor information go to www.malverninternational.com
(http://www.malverninternational.com/) .

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